In Search of an Efficient EDIcebreaker: Use of Electronic Marketplaces for the Diffusion of EDI amon

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In Search of an Efficient EDIcebreaker Use of
Electronic Marketplaces for the Diffusion of EDI
among SMEs

• Helle Zinner Henriksen
• Department of Informatics
• Copenhagen Business School, Denmark
• hzh.inf_at_cbs.dk

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EDIcebreaker, overview

• Background
• EDI in a nutshell
• The invisibility problem
• Electronic marketplaces
• EDI versus e-marketplaces
• the relevance of e-marketplaces for EDI users
• characteristics of real e-marketplaces
• Likelihood of diffusion
• Conclusion

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EDIcebreaker, EDI in a nutshell

• Large investment - low degree of use
• Rigid structure - good data quality
• High potential - low awareness
• Bad reputation - ...

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EDIcebreaker, background

• its frustrating we have put a lot of effort
  into the use of EDI with our parent company, but
  we can not use it with our customers - because
  they do not use EDI.
• Key account manager in company X

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EDIcebreaker, the invisibility problem

• SMEs invest in EDI but use the technology with
  only a few business partners due to lack of
  knowledge of their business partners EDI
  capabilities
• Our data shows that one out of four of the
  business partners are interested in exchanging
  EDI messages
• Characteristics of interested business partners
• - higher number of order lines
• - higher value of orders

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EDIcebreaker, EDI vs e-marketplaces

• EDI
• individually negotiated contracts
• rigid structure in messages
• bilateral information system
• integration of information possible
• E-marketplaces
• no prearranged commitment
• messages are generated in Web-template
• multilateral information system

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EDIcebreaker, are e-marketplaces of any relevance
to EDI users?

• What is the connection between e-marketplaces and
  EDI users?
• both are based on electronic data transactions
  over telecommunications networks
• both have so far proven to be most suitable for
  commodities and standardized products

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EDIcebreaker, electronic marketplaces

• Are e-marketplaces supporting the EDI users?
• - two of the four surveyed marketplaces
  explicitly mention EDI support
• - all generate suitable information for EDI
  messages

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EDIcebreaker, SO WHAT?

• Electronic marketplaces do not solve the
  invisibility problem. However, they hold the
  potential of breaking the isolation for SMEs that
  use EDI.

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EDIcebreaker, likelihood of diffusion

• Relative advantage
• the degree to which an innovation is perceived
  as being better than the idea it supersedes
• Better use of EDI investment due to higher degree
  of use

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EDIcebreaker, likelihood of diffusion

• Compatibility
• the degree to which an innovation is perceived
  as being consistent with the existing values,
  past experiences, and needs of the potential
  adopter
• The use of electronic marketplaces does not
  deviate substantially from the use of EDI and the
  use of the Internet.

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EDIcebreaker, likelihood of diffusion

• Complexity
• the degree to which an innovation is perceived
  as relatively difficult to understand and use
• Most companies are familiar with the media for
  electronic marketplaces.
• The marketplaces are relatively easy to navigate
  in and handle.

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EDIcebreaker, likelihood of diffusion

• Trialablity
• the degree to which an innovation may be
  experimented with on a limited basis
• Close to free access to the electronic
  marketplaces.
• Possible to test the e-marketplace on single
  purchase/ sale.

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EDIcebreaker, likelihood of diffusion

• Observability
• the degree to which the results of an innovation
  are visible to others
• To move to an electronic marketplace is not
  visible to the business community as such - and
  it is not even desirable in an competitive
  environment.

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EDIcebreaker, conclusion

• To move or not to move?
• There seem to be advantages
• The parameters for diffusion seems to be close to
  fulfilled
• What seems to determine the move to electronic
  marketplaces is whether EDI users among SMEs
  depend on direct or strategic benefits of EDI

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Post Scriptum How difficult can it be?